I want to buy some local products within the UK market, I then want to resell it to my overseas customers.
1. Do I need to register for VAT?
2. How do my customers claim VAT?
3. If my customers do claim VAT, would I lose any money?
I would suggest you refer to the HMRC website to get clarification on the points you raised. Their guidance on VAT and the need for registration is pretty clear. Website: www.hmrc.gov.uk/vat/index.htm.
However as a general guideline to your questions, please see below, but also check official guidance (above):
a) You usually need to regsiter for VAT if the total value of goods you deal with exceed £77,000.
b) Recovery of VAT charges depends on, whether you are charging for this and from your customers side, if they are based within the EU or outside of the EU. Again the HMRC website will be able to give guidance.
c) Depending on how you operate, you may need to consider the guidance on Distance Selling, also covered on the HMRC site.
If this is the first time for you to export goods, I would also suggest you contact your local UK Trade & Investment office and ask to speak to an International Trade Adviser.
Good luck !
Thanks for posting your query. A lot of the answers you are seeking depends upon where you are exporting your goods to. If that is within the EU there will be one VAT treatment and if it is outside of the EU then it follows another path.
You will have to register for VAT if you trade in the United Kingdon and you reach the VAT threshold of £77,000. You can choose to register voluntarily if your turnover is lower than that sum and there may be reasons for thinking about doing this depending upon what you are planning to sell and to whom you are making the sales.
If you are selling into the EU then the reverse charge rules come into play whereby you obtain the customers VAT number in their Country and then use that to say effectively I don’t need to charge VAT on this sale. There are occassions when you can also repeat this treatment with a business that is unregistered but you have to be able to prove that it is a business,
If you are selling outside of the EU then this is treated as an export and you should not need to charge VAT. You would however need to obtain odcumentary evidence that your sale was exported so that HMRC could be satisfied that an export took place.
If VAT has to be charged your decision is whether you issue a price that includes VAT or add VAT onto a net price. If you are stuck with a vat inclusive price then you may feel that you have lost money on a partiucular transaction if VAT needs to be charged.
This is a little confusing when you first start. My Firm could assist you and I would recommend that you contact us on 01376 326266 and talk to Mike Carabine who is able to provide clear guidance on VAT matters.
Information regarding VAT can be found in VAT Notice 700 The VAT Guide and VAT Notice 703 VAT: Export of goods from the United Kingdom copies of these notices are available from our website at www.hmrc.gov.uk > Quick links – Library, Official Statistics > Publications > Notices, Information Sheets and other reference materials > VAT > All VAT Notices (numerical order) > Yes to open site > Scroll to notice required.
Information on the Customs requirements for exporting are given in HMRC Public Notice 275. A copy of this notice can be found on our website www.hmrc.gov.uk under Quick Links > Library > Official Statistics – Publications – Notices, Info Sheets & Other Reference Materials > Import, Export & International Trade. The Public Notices are in numerical order.
HM Revenue & Customs
Customs International Trade & Excise